eBay promises US gov’t: No more “no poach” deals

eBay has settled charges that it agreed to a "no poach" deal with Intuit, in which neither company would hire each others' employees.

Under the deal, first reported by Reuters, eBay will pay $3.75 million to compensate workers who were affected by the deal. The settlement was outlined in May and authorized Tuesday by a San Francisco federal judge.

The settlement (PDF) terms also obligate eBay to not pressure any person to refrain from "hiring, soliciting, cold calling, recruiting, or otherwise competing for employees." For the next five years, the company will have to report to the government annually about any potential hiring violations and will be subject to inspections by the Department of Justice.

Government antitrust regulators originally sued eBay in 2012, accusing it of violating the law with a "handshake deal" between eBay and Intuit execs in place from 2006 until at least 2009, according to the government's complaint (PDF).

The "no poach" deal between eBay and Intuit actually looked like a "no hire" deal at points. Even when an Intuit employee was "dying" to work for eBay and had proactively reached out, hiring managers were told by eBay's VP of Human Resources Beth Axelrod that there was "an explicit hands off that we cannot violate with any Intuit employee... There is no flexibility on this."

At another point, Axelrod forwarded Whitman a recruiting flier that Intuit had sent to an eBay employee. Whitman sent it straight to Intuit founder and chairman Scott Cook, asking him to "remind your folks not to send this stuff to eBay people."

Whitman ran for governor of California in 2010 but lost to Jerry Brown. Today she is CEO of Hewlett-Packard.

eBay didn't comment on the settlement. Reuters notes that in May, eBay said, "The policy that prompted this lawsuit was acceptable and legal, and led to no anticompetitive effects in the talent market in which eBay competed."

Handshake hiring deals between Silicon Valley CEOs have been in the spotlight in the past few years, owing to DOJ actions followed by a high-profile class lawsuit in which employees of Adobe, Apple, Google, and Intel sued for compensation over the "no poach" deals.